[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

A BRIEF HISTORY
Labor unions are less important institutions in our economy than they used to be,
and they have always played a smaller role in the United States than in many
European countries. Unionization in the United States began in the late nineteenth
and early twentieth centuries. A variety of craft unions were established, consisting
of skilled workers such as carpenters, plumbers, and printers. In 1886, the American
Federation of Labor (AFL) was formed. Led by Samuel Gompers, the AFL gathered
together a number of these craft unions to enhance their bargaining power.
The Rise of Unions In the 1930s, two events strengthened union power: the
confederation of major industrial unions into the Congress of Industrial Organizations
(CIO) and the passage of the Wagner Act, which provided legal status to unions.
The CIO represented a major change in two respects. First, it embraced all workers,
unskilled as well as skilled; and second, it represented all the workers in a company.
These industrial unions, by uniting all workers across job categories, enhanced workers’
bargaining strength. Their leaders, such as Walter Reuther of the United
Automobile Workers (UAW), attained national prominence, and the unions were
able to obtain for their workers substantial wage increases and improvements in
working conditions. The 1935 Wagner Act set up the National Labor Relations Board,
which established procedures for certifying labor unions and preventing certain
practices on the part of firms trying to block workers from unionizing.
The Decline of Unions Prompted by concerns that the balance had swung
too far in favor of unions, Congress in 1947 passed the Labor-Management Relations
Act, better known as the Taft-Hartley Act. This law addressed two issues. First,
The United Auto Workers currently has 710,000 active union
members.
356 ∂ CHAPTER 16 IMPERFECTIONS IN THE LABOR MARKET